Financial specialists express concerns about potential turmoil: Excessively risky actions by Reeves could lead to a massive financial calamity, according to MAGGIE PAGANO.
Headline: UK Government's Borrowing Hits Record High, AstraZeneca Shuns UK for US Investment
The UK government's borrowing reached a record high in June 2023, with a £20.7 billion borrowing, £6.6 billion more than the same month the previous year. This makes June 2023 the second highest June borrowing since records began, surpassed only in 2020 during the pandemic. The cost of interest payments on the UK's nearly £3 trillion debt nearly doubled in June 2023, making it the second highest for June since 1993 due to inflation.
The UK government's borrowing is more than any government department spends, other than health. Higher UK gilt yields since March have reduced the Chancellor's 'fiscal headroom' from £9.9 billion to £6.7 billion. The UK has the third-highest borrowing costs among 36 advanced economies, the sixth-highest debt, and the fifth-highest deficit. Gilt yields on the 30-year benchmark government bond have been above 5 percent for most of the year, reaching 5.5 percent last week.
Meanwhile, AstraZeneca, a UK-based pharmaceutical giant, announced its decision not to build a plant in the UK, as opposed to the US. The UK government's incompetence was cited as a reason for this decision. AstraZeneca has instead decided to invest $50 billion in the US by the end of the decade, aiming for $80 billion in sales. This investment plan includes building a new drug manufacturing factory for chronic diseases in Virginia. The decision is due to potential tariffs on imported drugs that Donald Trump has threatened.
The UK government is urged to ensure that AstraZeneca keeps its primary listing in London, to prevent it from switching to New York. If forecasts are correct, the total borrowing for the financial year will be around £130 billion.
In a more practical context, counting to one billion is an exercise in futility that would take literal decades to centuries. The scale of government borrowing and national debt, often measured in trillions, makes a billion seem small by comparison—driving home just how massive modern fiscal numbers truly are.
References
- Online estimate
- China’s reserves
- Jeremy Harper's record
- U.S. public debt
Investing in the UK's finance sector might carry higher risks due to the government's escalating borrowing, with the total debt nearly reaching £3 trillion. The high interest payments on this debt and the resulting borrowing costs make the UK one of the most expensive among advanced economies. Conversely, AstraZeneca, a major UK-based business, is bypassing the UK in favor of US investment, citing potential taxes and financial instability. The pharmaceutical giant aims to invest $50 billion in US stocks, creating a new drug manufacturing facility for chronic diseases, while avoiding the UK.
